GST on Real Estate: Top Things You Must Know

For some analyst, GST might be a barrier against the govt's ambitious agenda of affordable housing because imposing GST on land would only increase the land costs. However; when finance ministry clarified there will be no tax for GST for projects which fall under the affordable housing scheme, many breathed a sigh of relief. The one nation - one tax idea will supposedly change the way we buy, think and largely live; and its limelight will fall on real estate as well. This article briefly describes the ways GST taxing system is changing the industry.

What GST will do?

• Ease compliance
• Help reduce or eliminate the cascading tax structure
• Develop uniform tax rates and structures
• Help in eliminating additional tax burdens on consumers
• Streamline the entire operation of tracing who is paying taxes adequately
• Improves the possibility of understanding the flow of tax system
• Offering higher threshold for registration
• composition scheme for small businesses
• Defined treatment for e commerce
• Increased and systematic efficiency for logistics
• Regulating the unorganized sectors
• Revenue will more likely to get a boost
• There will be boost in inventory
• Make in India will be popular
• Less developed states will get a chance to economically boost
• Manufacturing of good and products and services might get cheaper
• If things fall in line, the GDP might get a boost
• More scope to make improved sales online - one nation one tax - so no need to avoid states where selling products and services were earlier expensive

How GST will affect the industry of real estate?

Impact on residential sector

Indian property industry has seen some major developments off late due to government's increased regulations to add transparency and adequacy in the dealings so that common people or the end consumer is benefitted. With GST coming on front, many speculate it will further improve the industry of residential estate given now the tax structure is simplified and accountability is added in almost every layer. However, it will be too early to expect GST will heavily bring improved benefits since it might even bring down the demand initially and since the entire market is populated with confusion and uncertainty over the regulated use of GST - which is again time taking in terms of yielding the results - it is too early to expect any significant changes.

Benefits to property buyers

The impact of GST on end consumer and property buyer might be initially full of confusion; but as time goes by it is expected to regulate the changes and subsequently herald an entirely new age of confident buying, regulated and transparent spending and most importantly saving. GST makes the calculation of many aligned mathematics of home purchase simpler since the buyer needs to pay only a single tax. Also, the builder needs to pass on the benefits he enjoys because of input tax credit to the buyer.

Impact on affordable housing

Since finance ministry cleared that there will be no GST for housing projects which come under the affordable housing scheme for all; it is expected that affordable housing is safe. The non application of GST on affordable housing scheme will further allow the government to pursue its ambitious home for all agenda and also propel the entire scope for increased development in the industry - offering home for the needy

Benefits to developers

Earlier, a developer used to spend more under several layers of tax. Now, since only one type of tax is imposed; the developer is expected to not just save time and effort catering to many regulation of taxes, he can also save money by paying one centralized form of tax. Some essential products necessary for the establishment of real estate is expected to cheaper while some are expected to get costlier. But the logistics and transportation cist might come down thereby improving the scope for profit. So, a developer might initially fund GST a mix of both good and bad.

The rising cost in essential products is struggling with the downgrade in the price for transportation and logistics. The confusion and sentiments of buyers is fighting with the possibility of hopeful change. The need to save more is on a war against the need to be ethical.

So, these are some of the developments in the industry. To learn more about how can you get help about GST from specialized resource for real estate and any other sector; please feel free to click the website KwikBilling .